Tuesday, August 08, 2017

All talk and no walk

One of the major functions of the federal government is to provide funding for necessary projects for the common good that are beyond the local or state budgets. In addition to improvements in living, they provide substantial injections of money into the economies involved. Under Cheeto Mussolini there has been bigly amounts of talk about infrastructure investment and Trump's Dick sized actual investments.

The deterioration of the nation’s infrastructure has raised widespread concerns about safety, quality of life and the impact on economic growth. Politicians in both parties have declared the issue a priority. So far, there is no sign of a solution.

In 34 states, spending on government construction projects was lower last year than in 2007, adjusting for inflation. The trend has continued this year. Public construction spending in June was 9.5 percent lower than during the same month last year.

Ken Simonson, chief economist for the Associated General Contractors of America, said many states were struggling financially. Illinois, for example, briefly suspended work on 900 projects in early July during a standoff over the state’s budget.

“It’s always easier to defer new construction than to stop paying people who are on the payroll or the welfare rolls,” he said. “A lot of states are under real stress.”

Governments have cut back most sharply on new construction projects. Even so, the nation’s existing infrastructure continues to age and deteriorate.

The average road surface was 28 years old in 2015, up from 23 years old in 2000. Schools, power plants and airports also are getting older. Slower population growth means less demand for new construction — but also fewer tax dollars for repairs.

Arizona has reduced spending on public construction every year since 2007. State lawmakers, reluctant to raise taxes, have diverted money from highway work to pay for public services like Medicaid and prisons. One Arizona county, Navajo, has shifted from aiming to repave roads every 20 years to repaving every 40 years.

Roads are the largest category of public works, accounting for about a third of annual public works spending. The federal gas tax, at 18.4 cents a gallon, is the largest source of funding for those projects, but it is not indexed to inflation and has not been raised since 1993. It would need to be 31 cents a gallon to restore its buying power.

Since 2012, 31 states have enacted some kind of increase in transportation funding, according to Transportation for America, an advocacy group.

Indiana in April increased its gas tax and indexed it to future inflation.

California in April also passed its first gas tax increase in more than two decades.

And last month, West Virginia passed a package of higher taxes, including an increase in its gas tax, estimated to lift road funding by $140 million a year.

The Trump administration says it is still working on an infrastructure plan that would supplement the increases in state funding. Mr. Trump’s budget proposed just $200 billion in new infrastructure spending, plus unspecified incentives for private investment that it hopes will add another $800 billion over 10 years. But he also proposed larger cuts in projected public works funding.

For all the talk, little has been done nor will it be done. Anything effective would require tax increases on the owners of the Republican Party and the 1% are having none of that on their dime.